TITLE 26. HEALTH AND HUMAN SERVICES

PART 1. HEALTH AND HUMAN SERVICES COMMISSION

CHAPTER 550. LICENSING STANDARDS FOR PRESCRIBED PEDIATRIC EXTENDED CARE CENTERS

SUBCHAPTER B. LICENSING APPLICATION, MAINTENANCE, AND FEES

26 TAC §550.108

The Executive Commissioner of the Texas Health and Human Services Commission (HHSC) proposes amendments to §550.108, concerning Change of Ownership License Application Procedures and Issuance.

BACKGROUND AND PURPOSE

The purpose of the proposal is to authorize HHSC to issue a temporary change of ownership license in the name of the new owner of a prescribed pediatric extended care center (PPECC) and to complete a health inspection of the center while the new owner holds this temporary change of ownership license. The proposed amendment also authorizes HHSC to extend the duration of the temporary change of ownership license to allow HHSC additional time to perform the health inspection of the center.

These proposed amendments also update the licensure process to reflect the transition from paper applications to the use of the online licensure portal called Texas Unified Licensure Information Portal (TULIP) and to describe other processes relating to licensure and change of ownership.

The proposed amendments also add provisions to address the process for a license holder to change its name or add an owner with a disclosable interest when the center does not undergo a change of ownership.

In addition, the proposed amendments make non-substantive changes to add clarity; remove redundant language; change the lettering of the subsections to account for the addition of provisions; update rule references in response to the administrative transfer of the chapter from 40 Texas Administrative Code (TAC), Chapter 15, to 26 TAC Chapter 550; reorganize some provisions so that related topics are grouped together to facilitate navigation within the rule; and make edits to improve readability.

SECTION-BY-SECTION SUMMARY

The proposed amendment changes the title of the section by adding "and Notice of Changes" after "Change of Ownership License Application Procedures and Issuance."

The proposed amendment in subsection (a) adds a new definition for the term "temporary change of ownership license" to mean a temporary license issued to an applicant who proposes to become the new operator of a center that exists on the date the application is submitted. This proposed definition clarifies the meaning of the new term "temporary change of ownership license" as used in the rule.

The proposed amendments in new subsection (b) require the applicant to obtain a temporary change of ownership license followed by an initial three-year license in accordance with the section; explain that when HHSC approves the change of ownership by issuing a temporary change of ownership license to the new license holder, the current license holder's license becomes invalid as of the change of ownership's effective date indicated in the application; remove redundant language in current subsection (b) about the application requirements for an initial three-year license; and explain that between the change of ownership's effective date and the issuance of the temporary change of ownership license, the center's current license holder remains responsible under its license, although the applicant may operate a center on behalf of the current license holder during this period of time.

The proposed amendments in subsection (c) explain what the applicant is required to submit through HHSC's online portal TULIP; updates rule references in response to the administrative transfer of the chapter from 40 TAC Chapter 15 to 26 TAC Chapter 550; and directs the applicant and the center's current license holder to submit a signed and notarized Change of Ownership Transfer Affidavit HHSC Form 1092 through the online portal. In January 2021, HHSC began requiring the use of this new form for changes of ownership involving assisted living facilities, nursing facilities, intermediate care facilities for individuals with an intellectual disability or related conditions, day activity and health services facilities, PPECCs, and home and community support services agencies.

The proposed amendments in subsection (d) update rule references in response to the administrative transfer of the chapter from 40 TAC Chapter 15 to 26 TAC Chapter 550.

The proposed amendments in subsections (e) and (f) make minor grammatical and formatting changes for clarity.

The proposed amendments in subsection (g) set forth the requirements necessary for HHSC to issue a temporary change of ownership license; authorize HHSC to issue a temporary change of ownership license in the new owner's name and to complete a health inspection while the new owner holds a temporary change of ownership license; specify that the issuance of the temporary change of ownership license constitutes HHSC's written notice of approval of the application for the change of ownership; and clarify the effective date requirements for the license.

The proposed amendment in subsection (h) establishes the expiration date of the temporary change of ownership license.

The proposed amendment in subsection (i) allows HHSC, in its sole discretion, to extend a temporary change of ownership license for one term of 90 days based upon extenuating circumstances. This change gives HHSC the flexibility to extend the duration of the license to allow HHSC additional time to perform the health inspection of the center.

The proposed amendments in new subsection (j) state that HHSC conducts a health inspection after HHSC issues a temporary change of ownership license and before issuance of a three-year license.

The proposed amendments in new subsection (k) state that HHSC, in its sole discretion, may conduct an on-site Life Safety Code inspection of the center after issuing a temporary change of ownership license.

The proposed amendments in new subsection (l) specify the requirements for HHSC to determine whether to issue the temporary change of ownership license holder a three-year license. Among other requirements, the center must pass the health inspection described in the rule. The proposed amendments also remove current subsections (j) and (k) because they are redundant with other provisions in the rule, as amended.

The proposed amendments add new subsection (m) to outline the process for a license holder to change its name when a change of ownership is not involved. This change is consistent with similar provisions in the change of ownership rules for other long-term care providers.

The proposed amendments add new subsection (n) to describe the process for a license holder to add an owner with a disclosable interest when a change of ownership is not involved. This change is consistent with similar provisions in the change of ownership rules for other long-term care providers.

FISCAL NOTE

Trey Wood, Chief Financial Officer, has determined that for each year of the first five years that the rule will be in effect, enforcing or administering the rule does not have foreseeable implications relating to costs or revenues of state or local governments.

GOVERNMENT GROWTH IMPACT STATEMENT

HHSC has determined that during the first five years that the rule will be in effect:

(1) the proposed rule will not create or eliminate a government program;

(2) implementation of the proposed rule will not affect the number of HHSC employee positions;

(3) implementation of the proposed rule will result in no assumed change in future legislative appropriations;

(4) the proposed rule will not affect fees paid to HHSC;

(5) the proposed rule will not create a new rule;

(6) the proposed rule will expand an existing rule;

(7) the proposed rule will not change the number of individuals subject to the rule; and

(8) the proposed rule will not affect the state's economy.

SMALL BUSINESS, MICRO-BUSINESS, AND RURAL COMMUNITY IMPACT ANALYSIS

Trey Wood, Chief Financial Officer, has also determined that there will be no adverse economic effect on small businesses, micro-businesses, or rural communities. The proposed rules do not require changes to current business practices or impose additional costs or fees on those required to comply.

LOCAL EMPLOYMENT IMPACT

The proposed rule will not affect a local economy.

COSTS TO REGULATED PERSONS

Texas Government Code §2001.0045 does not apply to this rule because the rule does not impose a cost on regulated persons.

PUBLIC BENEFIT AND COSTS

Stephen Pahl, Deputy Executive Commissioner for Regulatory Services, has determined that for each year of the first five years the rule is in effect, the public benefit will be an anticipated decrease in the amount of time for a license to be issued in the incoming owner's name based on a change of ownership. The issuance of a temporary change of ownership license in the incoming owner's name allows the new owner to begin operational processes while HHSC is completing the health inspection of the center. These operational processes include entering contracts for leasing, lending, and Medicaid. Subsequently, the new owner can begin Medicaid billing and receive funding sooner, which will have a positive impact on the residents being served by the facility.

Another anticipated public benefit is a decrease in the transition time for the change of ownership, which will help both the outgoing and incoming owners of a facility in terms of business processes.

Trey Wood has also determined that for the first five years the rule is in effect, there are no anticipated economic costs to persons who are required to comply with the proposed rule because the proposed rule does not require changes to current business practices or impose additional costs or fees on those required to comply.

TAKINGS IMPACT ASSESSMENT

HHSC has determined that the proposal does not restrict or limit an owner's right to his or her property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking under Texas Government Code §2007.043.

PUBLIC COMMENT

Written comments on the proposal may be submitted to Rules Coordination Office, P.O. Box 13247, Mail Code 4102, Austin, Texas 78711-3247, or street address 4900 North Lamar Boulevard, Austin, Texas 78751; or emailed to HHSCLTCRRules@hhs.texas.gov.

To be considered, comments must be submitted no later than 31 days after the date of this issue of the Texas Register. Comments must be (1) postmarked or shipped before the last day of the comment period; (2) hand-delivered before 5:00 p.m. on the last working day of the comment period; or (3) emailed before midnight on the last day of the comment period. If last day to submit comments falls on a holiday, comments must be postmarked, shipped, or emailed before midnight on the following business day to be accepted. When emailing comments, please indicate "Comments on Proposed Rule 21R132" in the subject line.

STATUTORY AUTHORITY

The amendment is authorized by Texas Government Code §531.0055, which provides that the Executive Commissioner of HHSC shall adopt rules for the operation and provision of services by the health and human services agencies, and Texas Health and Safety Code §248A.101, requiring the Executive Commissioner to adopt rules necessary to implement Chapter 248A, Prescribed Pediatric Extended Care Centers.

The amendment implements Texas Government Code §531.0055 and Texas Health and Safety Code §248A.101.

§550.108.Change of Ownership License Application Procedures and Issuance and Notice of Changes.

(a) For purposes of this section, a temporary change of ownership license is a temporary license issued to an applicant who proposes to become the new operator of a center that exists on the date the application is submitted.

(b) [(a)] A center license is not assignable or transferable. The [If a change of ownership occurs, the] applicant (new license holder) must obtain a temporary change of ownership license followed by an initial three-year license in accordance with [subsection (c) of] this section. When the Texas Health and Human Services Commission (HHSC) approves the change of ownership by issuing a temporary change of ownership license to the new license holder, the current license holder's license becomes invalid as of the effective date of the change of ownership indicated in the application. Between the effective date of the change of ownership and the issuance of the temporary change of ownership license, the current license holder remains responsible under its license; however, the applicant may operate a center on behalf of the current license holder during such period of time.

[(b) An application for a center license when there is a change of ownership is an application for an initial license.]

(c) An applicant must submit to HHSC through the online portal:

(1) a complete application for a license in accordance with HHSC instructions and §550.101 [§15.101] of this subchapter (relating to Criteria and Eligibility for a License) or an incomplete application with a letter explaining the circumstances that prevented the inclusion of the missing information;

(2) the application fee, in accordance with §550.112 [§15.112] of this subchapter (relating to Licensing Fees);

(3) a letter of credit for $250,000 from a bank that is insured by the Federal Deposit Insurance Corporation, or other documentation acceptable to HHSC, to demonstrate the applicant's financial viability; and

(4) a signed and notarized Change of Ownership Transfer Affidavit HHSC Form 1092 [written notice] from the applicant and the center's current [existing ] license holder of intent to transfer operation of the center from the current license holder to the applicant, beginning on the change of ownership effective [a] date specified on the change of ownership application [by the applicant, unless waived in accordance with subsection (f) of this section].

(d) HHSC may deny issuance of a license if the applicant, a controlling person, or any person disclosed in the application [required to submit background and qualification information] fails to meet the criteria for a license established in §550.101 [§15.101] of this subchapter or for any reason specified in §550.115 [§15.115] of this subchapter (relating to Criteria for Denial of a License).

(e) To avoid a center operating without a license, an applicant must submit all items in subsection (c) of this section at least 30 days before the anticipated date of the change of ownership in accordance with HHSC [application] instructions, unless the 30-day notice requirement is waived in accordance with subsection (f) of this section.

(f) HHSC may waive the [The] 30-day notice required by subsection (e) of this section [may be waived by HHSC] if:

(1) the applicant presents evidence to HHSC demonstrating that an eviction of the center or a foreclosure of the property from which the center operates is imminent and that circumstance prevented the timely submission of the items specified in subsection (c) of this section [notice]; or

(2) HHSC, in its sole discretion, determines that circumstances are present that threaten a minor's health, safety, or welfare and necessitate waiver of timely submission of the items specified in subsection (c) of this section [notice].

(g) Upon HHSC approval of the items specified in subsection (c) of this section, HHSC issues a temporary change of ownership license to the applicant if HHSC finds that the applicant, all controlling persons, and all persons disclosed in the application satisfy the requirements in §§550.101(a) and (f) of this subchapter, 550.104 of this subchapter (relating to Applicant Disclosure Requirements), and 550.115 of this subchapter.

(1) The issuance of a temporary change of ownership license constitutes HHSC's official written notice to the facility of the approval of the application for a change of ownership.

(2) The effective date of the temporary change of ownership license is the date requested in the application and cannot precede the date the application is received by HHSC through the online portal.

(h) A temporary change of ownership license expires on the earlier of:

(1) 90 days after its effective date or the last day of any extension HHSC provides in accordance with subsection (i) of this section; or

(2) the date HHSC issues a three-year license in accordance with subsection (l) of this section.

(i) HHSC, in its sole discretion, may extend the term of a temporary change of ownership license by 90 days based upon extenuating circumstances.

(j) [(g)] HHSC conducts an on-site health inspection to verify compliance with the licensure requirements after [before] issuing a temporary change of ownership license [as a result of a change of ownership]. HHSC may conduct a desk review instead of an on-site health inspection after [before] issuing a temporary change of ownership license [as a result of a change of ownership] if:

(1) less than 50 percent of the direct or indirect ownership interest in the former license holder changed, when compared to the new license holder; or

(2) every person with a disclosable interest in the new license holder had a disclosable interest in the former license holder.

(k) [(h)] HHSC, in its sole discretion, may conduct an on-site Life Safety Code inspection after [before] issuing a temporary change of ownership license [as a result of a change of ownership].

(l) [(i)] If an applicant and all other persons disclosed in the application satisfy [meets] the requirements of §§550.101(a) and (f), 550.104, and 550.115 of this subchapter for a license, and the center passes the change of ownership health inspection as described in subsection (j) of this section, HHSC issues a three-year license. The effective date of the three-year license is the same date as the effective date of the change of ownership and cannot precede the date the application was received through the online portal [by HHSC Licensing and Credentialing Section].

[(j) The initial license issued to the new license holder expires on the third anniversary after the effective date.]

[(k) The previous license holder's license is invalid on the effective date of the new license holder's initial license.]

(m) If a license holder changes its name but does not undergo a change of ownership, the license holder must notify HHSC and submit documentation evidencing a legal name change by submitting an application through the online portal. On receipt of the notice and documentation, HHSC reissues the current license in the license holder's new name.

(n) If a license holder adds an owner with a disclosable interest, but the license holder does not undergo a change of ownership, the license holder must notify HHSC of the addition no later than 30 days after the addition of the owner by submitting an application through the online portal.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 3, 2022.

TRD-202201744

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: June 19, 2022

For further information, please call: (512) 438-3161


CHAPTER 551. INTERMEDIATE CARE FACILITIES FOR INDIVIDUALS WITH AN INTELLECTUAL DISABILITY OR RELATED CONDITIONS

The Executive Commissioner of the Texas Health and Human Services Commission (HHSC) proposes amendments to §551.16, concerning Change of Ownership and Notice of Changes, and to §551.214(d), concerning Protection of Residents After Report of Abuse, Neglect, and Exploitation, to correct a clerical error in the existing Texas Administrative Code.

BACKGROUND AND PURPOSE

The purpose of the proposal is to authorize HHSC to issue a temporary change of ownership license in the name of the new owner of an intermediate care facility for individuals with an intellectual disability or related conditions (ICF/IID) and to complete a health inspection of the facility while the new owner holds this temporary change of ownership license. The proposed amendment also authorizes HHSC to extend the duration of the temporary change of ownership license to allow HHSC additional time to perform the health inspection of the facility.

The proposed amendments also update the licensure process relating to change of ownership and make non-substantive changes to add clarity, improve consistency in the usage of terms, change the lettering of the subsections to account for the addition of provisions, and make edits to improve readability.

SECTION-BY-SECTION SUMMARY

The proposed amendment in §551.16(a) adds a new definition for the term "temporary change of ownership license" to mean a temporary license issued to an applicant who proposes to become the new operator of a facility that exists on the date the application is submitted. This proposed definition clarifies the meaning of the new term "temporary change of ownership license" as used in the rule. The amendment also adds language to state that once HHSC approves and issues a temporary change of ownership license, the new owner becomes responsible.

The proposed amendments in §551.16(b) require the applicant to obtain a temporary change of ownership license followed by an initial three-year license in accordance with the section; explain that when HHSC approves the change of ownership by issuing a temporary change of ownership license to the new license holder, the current license holder's license becomes invalid as of the change of ownership's effective date indicated in the application; and clarify that between the effective date of the change of ownership and the issuance of the temporary change of ownership license, the current license holder remains responsible under its license, although the applicant may operate a facility on behalf of the current license holder during this period of time.

The proposed amendments in §551.16(c) explain what the applicant is required to submit through HHSC's online portal, the Texas Unified Licensure Information Portal (TULIP). The amendments also direct the applicant and the facility's current license holder to submit a signed and notarized Change of Ownership Transfer Affidavit HHSC Form 1092 through the online portal. In January 2021, HHSC began requiring the use of this new form for changes of ownership involving assisted living facilities, nursing facilities, ICF/IIDs, day activity and health services facilities, prescribed pediatric extended care centers, and home and community support services agencies.

The proposed amendments in §551.16(d) and (e) make minor grammatical and formatting changes for clarity.

The proposed amendments in §551.16(f) set forth the requirements necessary for HHSC to issue a temporary change of ownership license; authorize HHSC to issue a temporary change of ownership license in the new owner's name and to complete a health inspection while the new owner holds a temporary change of ownership license; specify that the issuance of the temporary change of ownership license constitutes HHSC's written notice of approval of the application for the change of ownership; and clarify the effective date requirements for the license.

The proposed amendment in §551.16(g) establishes the expiration date of the temporary change of ownership license.

The proposed amendment in §551.16(h) allows HHSC, in its sole discretion, to extend a temporary change of ownership license for a term of 90 days at a time based upon extenuating circumstances. This change gives HHSC the flexibility to extend the duration of the license to allow HHSC additional time to perform the health inspection of the facility.

The proposed amendments in §551.16(i) state that HHSC conducts a health inspection after HHSC issues a temporary change of ownership license and before issuance of a three-year license.

The proposed amendments in §551.16(j) state that HHSC, in its sole discretion, may conduct an on-site Life Safety Code inspection of the facility after issuing a temporary change of ownership license.

The proposed amendments in §551.16(k) specify the requirements for HHSC to determine whether to issue the temporary change of ownership license holder a three-year license. Among other requirements, the facility must pass the health inspection described in the rule.

The proposed amendments change the lettering of current §551.16(h) to new §551.16(l) and current §551.16(i) to new §551.16(m) to account for the addition of a new §551.16(a).

The proposed amendment to §551.214 inserts "legally authorized representative (LAR)" to correct a clerical error.

FISCAL NOTE

Trey Wood, Chief Financial Officer, has determined that for each year of the first five years that the rule will be in effect, enforcing or administering the rule does not have foreseeable implications relating to costs or revenues of state or local governments.

GOVERNMENT GROWTH IMPACT STATEMENT

HHSC has determined that during the first five years that the rule will be in effect:

(1) the proposed rule will not create or eliminate a government program;

(2) implementation of the proposed rule will not affect the number of HHSC employee positions;

(3) implementation of the proposed rule will result in no assumed change in future legislative appropriations;

(4) the proposed rule will not affect fees paid to HHSC;

(5) the proposed rule will not create a new rule;

(6) the proposed rule will expand an existing rule;

(7) the proposed rule will not change the number of individuals subject to the rule; and

(8) the proposed rule will not affect the state's economy.

SMALL BUSINESS, MICRO-BUSINESS, AND RURAL COMMUNITY IMPACT ANALYSIS

Trey Wood, Chief Financial Officer, has also determined that there will be no adverse economic effect on small businesses, micro-businesses, or rural communities. The proposed amendments do not require changes to current business practices or impose costs or fees on those required to comply.

LOCAL EMPLOYMENT IMPACT

The proposed rule will not affect a local economy.

COSTS TO REGULATED PERSONS

Texas Government Code §2001.0045 does not apply to this rule because the rule does not impose a cost on regulated persons.

PUBLIC BENEFIT AND COSTS

Stephen Pahl, Deputy Executive Commissioner for Regulatory Services, has determined that for each year of the first five years the rule is in effect, the public benefit will be an anticipated decrease in the amount of time for a license to be issued in the incoming owner's name based on a change of ownership. The issuance of a temporary change of ownership license in the incoming owner's name allows the new owner to begin operational processes while HHSC is completing the health inspection of the facility. These operational processes include entering contracts for leasing, lending, and Medicaid. Subsequently, the new owner can begin Medicaid billing and receive funding sooner, which will have a positive impact on the residents being served by the facility.

Another anticipated public benefit is a decrease in the transition time for the change of ownership, which will help both the outgoing and incoming owners of a facility in terms of business processes.

Trey Wood has also determined that for the first five years the rule is in effect, there are no anticipated economic costs to persons who are required to comply with the proposed rule because the proposed rule does not require changes to current business practices or impose additional costs or fees on those required to comply.

TAKINGS IMPACT ASSESSMENT

HHSC has determined that the proposal does not restrict or limit an owner's right to his or her property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking under Texas Government Code §2007.043.

PUBLIC COMMENT

Written comments on the proposal may be submitted to Rules Coordination Office, P.O. Box 13247, Mail Code 4102, Austin, Texas 78711-3247, or street address 4900 North Lamar Boulevard, Austin, Texas 78751; or emailed to HHSCLTCRRules@hhs.texas.gov.

To be considered, comments must be submitted no later than 31 days after the date of this issue of the Texas Register. Comments must be (1) postmarked or shipped before the last day of the comment period; (2) hand-delivered before 5:00 p.m. on the last working day of the comment period; or (3) emailed before midnight on the last day of the comment period. If last day to submit comments falls on a holiday, comments must be postmarked, shipped, or emailed before midnight on the following business day to be accepted. When emailing comments, please indicate "Comments on Proposed Rule 21R132" in the subject line.

SUBCHAPTER B. APPLICATION PROCEDURES

26 TAC §551.16

STATUTORY AUTHORITY

The amendments are authorized by Texas Government Code §531.0055, which provides that the Executive Commissioner of HHSC shall adopt rules for the operation and provision of services by the health and human services agencies, operation and provision of services by the health and human services agencies, and Texas Health and Safety Code §252.008, which requires the Executive Commissioner to adopt rules related to the administration and implementation of Chapter 252, Intermediate Care Facilities for Individuals with an Intellectual Disability.

The amendments implement Texas Government Code §531.0055 and Texas Health and Safety Code §252.008.

§551.16.Change of Ownership and Notice of Changes.

(a) For purposes of this section, a temporary change of ownership license is a temporary license issued to an applicant who proposes to become the new operator of a facility that exists on the date the application is submitted.

(b) [(a)] A license holder may not transfer its license. The applicant (new license holder) [If a change of ownership occurs, the license holder's license becomes invalid on the date of the change of ownership. The prospective new license holder] must obtain a temporary change of ownership license followed by an initial three-year license in accordance with [subsection (b) of] this section. When the Texas Health and Human Services Commission (HHSC)[[; however, the original license holder remains responsible until HHSC] ] approves the change of ownership by issuing a temporary change of ownership license to the new license holder, the current license holder's license becomes invalid as of the effective date of the change of ownership indicated in the change of ownership application. Between the effective date of the change of ownership and the issuance of the temporary change of ownership license, the current license holder remains responsible under its license; however, the applicant may operate a facility on behalf of the current license holder during such period of time.

(c) [(b)] The applicant [A prospective new license holder] must submit to HHSC through the online portal [the Texas Health and Human Services Commission (HHSC)]:

(1) a complete application for a license in accordance with HHSC instructions and [through the online portal under] §551.11 of this subchapter (relating to Criteria for Licensing) or an incomplete application with a letter explaining the circumstances that prevented the inclusion of the missing information [through the online portal];

(2) the application fee, in accordance with §551.19 of this subchapter (relating to License Fees); and

(3) a signed and notarized Change of Ownership Transfer Affidavit HHSC Form 1092 [, written notice] from the applicant and the facility's current [existing] license holder of intent to transfer operation of the facility from the current license holder to the applicant beginning on the change of ownership effective [a] date specified on the change of ownership [by the applicant], unless waived in accordance with subsection (d) of this section.

(d) [(c)] To avoid a facility operating without a license, an applicant [a prospective license holder] must submit all items in subsection (c)[(b)] of this section at least 30 days before the anticipated date of the change of ownership in accordance with HHSC instructions, unless the 30-day notice requirement is waived in accordance with subsection (e) of this section.

(e) [(d)] HHSC may waive the 30-day [The] notice required by subsection (d)[(b)(3)] of this section [may be waived by HHSC] if HHSC determines that the applicant presents [prospective license holder presented] evidence showing that circumstances prevented the submission of the items in subsection (c) of this section at least 30 days before the anticipated date of the change of ownership [notice] and that not waiving the 30-day requirement [notice] would create a threat to resident welfare or health and safety.

(f) Upon HHSC approval of the items in subsection (c) of this section, HHSC issues a temporary change of ownership license to the applicant if HHSC finds that the applicant, all controlling persons, and all person disclosed in the application satisfy the requirements in §§551.11(d) of this subchapter, 551.13 of this subchapter (relating to Applicant Disclosure Requirements), and 551.17 of this subchapter (relating to Criteria for Denying a License or Renewal of a License).

(1) The issuance of a temporary change of ownership license constitutes HHSC's official written notice to the facility of the approval of the application for a change of ownership.

(2) The effective date of the temporary change of ownership license is the date requested in the application and cannot precede the date the application is received by HHSC through the online portal.

(g) A temporary change of ownership license expires on the earlier of:

(1) 90 days after its effective date or the last day of any extension HHSC provides in accordance with subsection (h) of this section; or

(2) the date HHSC issues a three-year license in accordance with subsection (k) of this section.

(h) HHSC, in its sole discretion, may extend the temporary change of ownership license for a term of 90 days at a time based on extenuating circumstances.

(i) [(e)] HHSC conducts an on-site health inspection to verify compliance with the licensure requirements after [before] issuing a temporary change of ownership license [as a result of a change of ownership]. HHSC may conduct a desk review instead of an on-site health inspection after [before] issuing a temporary change of ownership license [as a result of a change of ownership] if:

(1) less than 50 percent of the direct or indirect ownership interest in the former license holder changed, when compared to the new license holder; or

(2) every owner with a disclosable interest in the new license holder had a disclosable interest in the former license holder.

(j) [(f)] HHSC, in its sole discretion, may conduct an on-site Life Safety Code inspection after [before] issuing a temporary change of ownership license [as a result of a change of ownership].

(k) If an applicant, all controlling persons, and all person disclosed in the application satisfy the requirements of §§551.11(d), 551.13, and 551.17 of this subchapter, and the facility passes the change of ownership health inspection as described in subsection (i) of this section, HHSC issues a three-year license.

[(g)] The effective date of the license is the same date as the effective date of the change of ownership and cannot precede the date the application was received by HHSC through the online portal.

(l) [(h)] If a license holder changes its name but does not undergo a change of ownership, the license holder must notify HHSC and submit documentation evidencing a legal name change by submitting an application through the online portal. On receipt of the notice and documentation, HHSC reissues the current license in the license holder's new name.

(m) [(i)] If a license holder adds an owner with a disclosable interest, but the license holder does not undergo a change of ownership, the license holder must notify HHSC of the addition no later than 30 days after the addition of the owner by submitting an application through the online portal.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 3, 2022.

TRD-202201745

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: June 19, 2022

For further information, please call: (512) 438-3161


SUBCHAPTER G. ABUSE, NEGLECT, AND EXPLOITATION; COMPLAINT AND INCIDENT REPORTS AND INVESTIGATIONS

26 TAC §551.214

STATUTORY AUTHORITY

The amendments are authorized by Texas Government Code §531.0055, which provides that the Executive Commissioner of HHSC shall adopt rules for the operation and provision of services by the health and human services agencies, operation and provision of services by the health and human services agencies, and Texas Health and Safety Code §252.008, which requires the Executive Commissioner to adopt rules related to the administration and implementation of Chapter 252, Intermediate Care Facilities for Individuals with an Intellectual Disability.

The amendments implement Texas Government Code §531.0055 and Texas Health and Safety Code §252.008.

§551.214.Protection of Residents After Report of Abuse, Neglect, and Exploitation.

(a) - (c) (No change.)

(d) Within 24 hours of making or learning of an allegation of abuse, neglect, or exploitation, the facility must notify the alleged victim and the victim's legally authorized representative (LAR) that an allegation of abuse, neglect, or exploitation involving the victim has been made and reported. If the facility cannot notify the LAR in person or by phone, the facility must notify the LAR by certified mail with a return receipt requested.

(e) (No change.)

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 3, 2022.

TRD-202201820

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: June 19, 2022

For further information, please call: (512) 438-3161


CHAPTER 553. LICENSING STANDARDS FOR ASSISTED LIVING FACILITIES

SUBCHAPTER B. LICENSING

26 TAC §553.35

The Executive Commissioner of the Texas Health and Human Services Commission (HHSC) proposes amendments to §553.35, concerning Change of Ownership and Notice of Changes.

BACKGROUND AND PURPOSE

The purpose of the proposal is to authorize HHSC to issue a temporary change of ownership license in the name of the new owner of an assisted living facility (ALF) and to complete a health inspection while the new owner holds this temporary change of ownership license. The proposed amendment also authorizes HHSC to extend the duration of the temporary change of ownership license to allow HHSC additional time to perform the health inspection of the ALF.

The proposed amendments also allow HHSC, under certain circumstances, to waive the requirement for an applicant to submit a complete application at least 30 days before the anticipated date of the change of ownership.

The proposed amendments also update the licensure process relating to change of ownership and addresses the process for a license holder to change its name when the facility does not undergo a change of ownership and makes non-substantive changes to add clarity, remove redundant language, change the lettering of the subsections to account for the addition of provisions, reorganize some provisions so that related topics are grouped together to facilitate navigation within the rule, and make edits to improve readability.

SECTION-BY-SECTION SUMMARY

The proposed amendment in subsection (a) adds a new definition for the term "temporary change of ownership license" to mean a temporary license issued to an applicant who proposes to become the new operator of a facility that exists on the date the application is submitted. The amendment clarifies the meaning of the new term "temporary change of ownership license" as used in the rule.

The proposed amendments in subsection (b) require the applicant to obtain a temporary change of ownership license followed by an initial three-year license in accordance with the section; explain that when HHSC approves the change of ownership by issuing a temporary change of ownership license to the new license holder, the current license holder's license becomes invalid as of the change of ownership's effective date indicated in the application; and explain that between the change of ownership's effective date and the issuance of the temporary change of ownership license, the facility's current license holder remains responsible under its license, although the applicant may operate the facility on behalf of the current license holder during this period of time.

The proposed amendments in subsection (c) explain what the applicant is required to submit and clarify that an applicant may submit an incomplete application with a letter explaining the circumstances that prevented the inclusion of the missing information through HHSC's online portal, the Texas Unified Licensure Information Portal (TULIP). These changes are consistent with the change of ownership license application processes for other long-term care providers. The proposed amendments also direct the applicant and the facility's current license holder to submit a signed and notarized Change of Ownership Transfer Affidavit HHSC Form 1092 through the online portal. In January 2021, HHSC began requiring the use of this new form for changes of ownerships involving ALFs, nursing facilities (NFs), intermediate care facilities for individuals with an intellectual disability or related conditions (ICF/IIDs), day activity and health services (DAHS) facilities, prescribed pediatric extended care centers (PPECCs), and home and community support services agencies (HCSSAs).

The proposed amendments in subsection (d) make minor clarifying changes and remove change of ownership effective date language that is proposed to be moved to subsection (f)(2).

The proposed amendment removes current subsection (d) because it contains language redundant with 26 Texas Administrative Code (TAC) §553.751(a)(7), which authorizes HHSC to assess an administrative penalty against a person who fails to notify HHSC before the effective date of the change of ownership, and to be consistent with other CHOW rules that do not have this redundant language.

The proposed amendment removes language in current subsection (e) because it is redundant with the language proposed to be added in subsection (b) concerning the responsibility of the current ALF license holder while the application for a temporary license is pending.

The proposed amendment in subsection (e) adds a provision for an applicant to seek a waiver of the requirement to submit a complete application at least 30 days before the anticipated date of the change of ownership if HHSC determines certain circumstances have been demonstrated. This change is consistent with the change of ownership license application processes for other long-term care providers. The amendment also specifies the criteria for HHSC to determine whether to grant a waiver of the 30-day requirement.

The proposed amendments in subsection (f) set forth the requirements necessary for HHSC to issue a temporary change of ownership license, authorize HHSC to issue a temporary change of ownership license in the new owner's name and to complete a health inspection while the new owner holds a temporary change of ownership license specify that the issuance of the temporary change of ownership license constitutes HHSC's written notice of approval of the application for the change of ownership, and clarify the effective date requirements for the license.

The proposed amendment in subsection (g) establishes the expiration date of the temporary change of ownership license.

The proposed amendment in subsection (h) allows HHSC, in its sole discretion, to extend a temporary change of ownership license for a term of 90 days at a time based upon extenuating circumstances. This change gives HHSC the flexibility to extend the duration of the license to allow HHSC additional time to perform the health inspection of the facility.

The proposed amendment in subsection (i) states that HHSC conducts a health inspection after HHSC issues a temporary change of ownership license and before issuance of a three-year license.

The proposed amendment in subsection (j) states that HHSC, in its sole discretion, may conduct an on-site Life Safety Code inspection of the facility after issuing a temporary change of ownership license.

The proposed amendments in subsection (k) specify the requirements for HHSC to determine whether to issue the temporary change of ownership license holder a three-year license. Among other requirements, the facility must pass the health inspection described in the rule. In addition, the amendments clarify the effective date of the three-year license.

The proposed amendments in subsections (l), (m), and (n) make edits for clarity.

The proposed amendments add new subsection (o) to outline the process for a license holder to change its name when a change of ownership is not involved. This change is consistent with similar provisions in the change of ownership rules for other long-term care providers.

FISCAL NOTE

Trey Wood, Chief Financial Officer, has determined that for each year of the first five years that the rule will be in effect, enforcing or administering the rule does not have foreseeable implications relating to costs or revenues of state or local governments.

GOVERNMENT GROWTH IMPACT STATEMENT

HHSC has determined that during the first five years that the rule will be in effect:

(1) the proposed rule will not create or eliminate a government program;

(2) implementation of the proposed rule will not affect the number of HHSC employee positions;

(3) implementation of the proposed rule will result in no assumed change in future legislative appropriations;

(4) the proposed rule will not affect fees paid to HHSC;

(5) the proposed rule will not create a new rule;

(6) the proposed rule will expand an existing rule;

(7) the proposed rule will not change the number of individuals subject to the rule; and

(8) the proposed rule will not affect the state's economy.

SMALL BUSINESS, MICRO-BUSINESS, AND RURAL COMMUNITY IMPACT ANALYSIS

Trey Wood has also determined that there will be no adverse economic effect on small businesses, micro-businesses, or rural communities. The proposed amendments do not require changes to current business practices or impose additional costs or fees on those required to comply.

LOCAL EMPLOYMENT IMPACT

The proposed rule will not affect a local economy.

COSTS TO REGULATED PERSONS

Texas Government Code §2001.0045 does not apply to this rule because the rule does not impose a cost on regulated persons.

PUBLIC BENEFIT AND COSTS

Stephen Pahl, Deputy Executive Commissioner for Regulatory Services, has determined that for each year of the first five years the rule is in effect, the public benefit will be an anticipated decrease in the amount of time for HHSC to issue a license in the incoming owner's name based on a change of ownership. The issuance of a temporary change of ownership license in the incoming owner's name allows the new owner to begin operational processes while HHSC is completing the health inspection of the facility, such as entering contracts for leasing, lending, and Medicaid. Subsequently, the new owner can begin Medicaid billing and receive funding sooner, which will have a positive impact on the residents being served by the facility.

Another anticipated public benefit is a decrease in the transition time for the change of ownership, which will help both the outgoing and incoming owners of a facility in terms of business processes.

Trey Wood has also determined that for the first five years the rule is in effect, there are no anticipated economic costs to persons who are required to comply with the proposed rule because the proposed rule does not require changes to current business practices or impose additional costs or fees on those required to comply.

TAKINGS IMPACT ASSESSMENT

HHSC has determined that the proposal does not restrict or limit an owner's right to his or her property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking under Texas Government Code §2007.043.

PUBLIC COMMENT

Written comments on the proposal may be submitted to Rules Coordination Office, P.O. Box 13247, Mail Code 4102, Austin, Texas 78711-3247, or street address 4900 North Lamar Boulevard, Austin, Texas 78751; or emailed to HHSCLTCRRules@hhs.texas.gov.

To be considered, comments must be submitted no later than 31 days after the date of this issue of the Texas Register. Comments must be (1) postmarked or shipped before the last day of the comment period; (2) hand-delivered before 5:00 p.m. on the last working day of the comment period; or (3) emailed before midnight on the last day of the comment period. If last day to submit comments falls on a holiday, comments must be postmarked, shipped, or emailed before midnight on the following business day to be accepted. When emailing comments, please indicate "Comments on Proposed Rule 21R132" in the subject line.

STATUTORY AUTHORITY

The amendment is authorized by Texas Government Code §531.0055, which provides that the Executive Commissioner of HHSC shall adopt rules for the operation and provision of services by the health and human services agencies, and Texas Health and Safety Code §247.025, which requires the Executive Commissioner to adopt rules necessary to implement Chapter 247, Assisted Living Facilities.

The amendment implements Texas Government Code §531.0055 and Texas Health and Safety Code §247.025.

§553.35.Change of Ownership and Notice of Changes.

(a) For purposes of this section, a temporary change of ownership license is a temporary license issued to an applicant who proposes to become the new operator of a facility that exists on the date the application is submitted.

(b) [(a)] A license holder may not transfer its license. The applicant (new license holder) must obtain a temporary change of ownership license followed by an initial three-year license in accordance with this section. When the Texas Health and Human Services Commission (HHSC) approves the change of ownership by issuing a temporary change of ownership license to the new license holder, the current license holder's license becomes invalid as of the effective date of the change of ownership indicated in the change of ownership application. Between the effective date of the change of ownership and the issuance of the temporary change of ownership license, the current license holder remains responsible under its license; however, the applicant may operate a facility on behalf of a current license holder during such period of time.

(c) [(b)] An applicant [A prospective license holder] must submit to HHSC through[, via] the online portal:[,]

(1) a complete HHSC application for a [an initial] license [based on a change of ownership] in accordance with HHSC instructions and §553.23 of this subchapter (relating to Initial Application Procedures and Requirements) or an incomplete application with a letter explaining the circumstances that prevented the inclusion of the missing information;[.]

(2) [The] full payment of the fees required in §553.47 of this subchapter (relating to License Fees); and

(3) a signed and notarized Change of Ownership Transfer Affidavit HHSC Form 1092 from the applicant and the facility's current license holder of intent to transfer operation of the facility from the current license holder to the applicant, beginning on the change of ownership effective date specified on the change of ownership application. [must be submitted no less than 30 days before the date the prospective license holder seeks to be licensed based on a change of ownership.]

(d) [(c)] To avoid a facility operating while unlicensed, an applicant must submit all items required by subsection (c) of this section [an application for an initial license based on a change of ownership] at least 30 days before the anticipated date of the change of ownership, unless the 30-day notice requirement is waived in accordance with subsection (e) of this section. [The effective date of the change of ownership cannot precede the date the application is received by the HHSC Licensing and Credentialing Section, Long-term Care Regulation.]

[(d) HHSC may assess an administrative penalty in accordance with Subchapter H, Division 9 of this chapter (relating to Administrative Penalties) against a person who fails to notify HHSC before the effective date of the change of ownership.]

(e) HHSC may waive the 30-day notice required by subsection (d) of this section if HHSC determines that the applicant presents evidence showing that circumstances prevented the submission of the items specified in subsection (c) of this section and that not waiving the notice would create a threat to resident welfare or health and safety.

[(e) Pending HHSC review of the application for an initial license based on a change of ownership, the current license holder must continue to meet all requirements for operation of the facility.]

(f) Upon HHSC approval of the items specified in subsection (c) of this section, HHSC issues a temporary change of ownership license to the applicant if HHSC finds that the applicant, all controlling persons, and all persons disclosed in the application satisfy the requirements in §553.17 of this subchapter (relating to Criteria for Licensing), except for §553.17(c) and (d).

(1) The issuance of a temporary change of ownership license constitutes HHSC's official written notice to the facility of the approval of the application for a change of ownership.

(2) The effective date of the temporary change of ownership license is the date requested in the application and cannot precede the date the application is received by HHSC through the online portal.

(g) A temporary change of ownership license expires on the earlier of:

(1) 90 days after its effective date or the last day of any extension HHSC provides in accordance with subsection (h) of this section; or

(2) the date HHSC issues a three-year license in accordance with subsection (k) of this section.

(h) HHSC, in its sole discretion, may extend a temporary change of ownership license for a term of 90 days at a time based upon extenuating circumstances.

(i) [(f)] HHSC staff conduct an on-site health inspection to verify compliance with the licensure requirements after [before] issuing a temporary change of ownership license [based on a change of ownership]. HHSC may conduct a desk review instead of an on-site health inspection after issuing a temporary change of ownership if [HHSC determines that the prospective license holder will have a new tax identification number and]:

(1) less than 50 percent of the direct or indirect ownership interest in the former [current] license holder differs from that of the new [prospective] license holder; or

(2) every owner with a disclosable interest in the new [prospective] license holder has a disclosable interest in the former [current] license holder.

(j) [(g)] HHSC, in its sole discretion, may conduct an on-site Life Safety Code inspection of the facility after issuing a temporary change of ownership license [to determine if the facility meets the applicable NFPA 101 and other physical plant requirements in Subchapter D of this chapter (relating to Facility Construction), and, as applicable, §553.311 of this chapter (relating to Physical Plant Requirements in Alzheimer's Units) before issuing a license based on a change of ownership].

(k) [(h)] If the applicant, all controlling persons, and all persons disclosed in the application satisfy the requirements of §553.17 of this subchapter, except for §553.17(c)(1)(A) - (C), for a license, and the facility passes the change of ownership health inspection as described in subsection (i) of this section, HHSC issues a three-year [the] license within 30 days after HHSC determines that the applicant and the facility have met the licensure requirements of this section. The effective date of the three-year license is the same date as the effective date of the change of ownership and cannot precede the date the application was received by HHSC through the online portal. [The issuance of a license constitutes HHSC's official written notice to the facility of the approval of the application for a change of ownership.]

(l) [(i)] HHSC may deny an application for a change of ownership if the applicant, controlling person, or any person disclosed in the application [required to submit background and qualification information] fails to meet the criteria for a license established in §553.17 of this subchapter [(relating to Criteria for Licensing)].

(m) [(j)] If HHSC denies an application for a temporary change of ownership license or a three-year license [an initial license based on a change of ownership], HHSC sends the applicant a written notice of the denial and informs the applicant of the applicant's right to request an administrative hearing to appeal the denial. The administrative hearing is held in accordance with HHSC [Texas Health and Human Services Commission] rules at 1 TAC Chapter 357, Subchapter I (relating to Hearings Under the Administrative Procedure Act).

(n) [(k)] If a license holder that is not a publicly traded company adds an owner with a disclosable interest, but the license holder does not undergo a change of ownership, the license holder must notify HHSC [via the online portal] no later than 30 days after the addition of the owner by submitting an application through the online portal.

(o) If a license holder changes its name but does not undergo a change of ownership, the license holder must notify HHSC and submit documentation evidencing a legal name change by submitting an application through the online portal. On receipt of the notice and documentation, HHSC reissues the current license in the license holder's new name.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 3, 2022.

TRD-202201746

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: June 19, 2022

For further information, please call: (512) 438-3161


CHAPTER 559. DAY ACTIVITY AND HEALTH SERVICES REQUIREMENTS

SUBCHAPTER B. APPLICATION PROCEDURES

26 TAC §559.16

The Executive Commissioner of the Texas Health and Human Services Commission (HHSC) proposes amendments to §559.16, concerning Change of Ownership and Notice of Changes.

BACKGROUND AND PURPOSE

The purpose of the proposal is to authorize HHSC to issue a temporary change of ownership license in the name of the new owner of a day activity and health service (DAHS) facility and to complete a health inspection of the facility while the new owner holds this temporary change of ownership license. The proposal also authorizes HHSC to extend the duration of the temporary change of ownership license to allow HHSC additional time to perform the health inspection of the DAHS facility.

The proposed amendments also update the licensure process to reflect the transition from paper applications to the use of the online licensure portal called the Texas Unified Licensure Information Portal (TULIP) and to clarify other processes relating to licensure and change of ownership.

The proposed amendments also address the process for a license holder to change its name when the facility does not undergo a change of ownership, and make non-substantive changes to add clarity; correct obsolete references from the legacy agency, Department of Aging and Disability Services (DADS), to HHSC; update rule references in response to the administrative transfer of the chapter from 40 Texas Administrative Code (TAC), Chapter 98, to 26 TAC, Chapter 559; change the lettering of the subsections to account for the addition of provisions; reorganize some provisions so that related topics are grouped together to facilitate navigation within the rule; and make edits to improve readability.

SECTION-BY-SECTION SUMMARY

The proposed amendment in subsection (a) defines the term "temporary change of ownership license" to mean a temporary license issued to an applicant who proposes to become the new operator of a DAHS facility that exists on the date the application is submitted. This proposed definition clarifies the meaning of the new term "temporary change of ownership license" as used in the rule.

The proposed amendments in subsection (b) require the applicant to obtain a temporary change of ownership license followed by an initial three-year license in accordance with the section; explain that when HHSC approves the change of ownership by issuing a temporary change of ownership license to the new license holder, the current license holder's license becomes invalid as of the change of ownership's effective date indicated in the application; and explain that between the change of ownership's effective date and the issuance of the temporary change of ownership license, the facility's current license holder remains responsible under its license, although, the applicant may operate a facility on behalf of the current license holder during this period.

The proposed amendments in subsection (c) explain what the applicant is required to submit through HHSC's online portal TULIP. The amendments also direct the applicant and the facility's current license holder to submit a signed and notarized Change of Ownership Transfer Affidavit HHSC Form 1092 through the online portal. In January 2021, HHSC began requiring the use of this new form for changes of ownerships involving assisted living facilities, nursing facilities, intermediate care facilities for individuals with an intellectual disability or related conditions, DAHS facilities, prescribed pediatric extended care centers, and home and community support services agencies.

The proposed amendments in subsection (d) remove a reference to an outdated rule section in repealed 40 TAC, Chapter 98; and remove outdated DADS application process language in current subsections (b) and (c).

The proposed amendment in subsection (e) requires an applicant to seek a waiver of the requirement to submit a complete application at least 30 days before the anticipated date of the change of ownership if HHSC determines certain circumstances have been demonstrated. This change is consistent with the change of ownership license application processes for other long-term care providers. The amendment also specifies the criteria for HHSC to determine whether to grant a waiver of the 30-day requirement.

The proposed amendments in subsection (f) set forth the requirements necessary for HHSC to issue a temporary change of ownership license; authorize HHSC to issue a temporary change of ownership license in the new owner's name and to complete a health inspection while the new owner holds a temporary change of ownership license; specify that the issuance of the temporary change of ownership license constitutes HHSC's written notice of approval of the application for the change of ownership; and clarify the effective date requirements for the license.

The proposed amendment in subsection (g) establishes the expiration date of the temporary change of ownership license.

The proposed amendment subsection (h) allows HHSC, in its sole discretion, to extend a temporary change of ownership license for a term of 90 days at a time based upon extenuating circumstances. This change gives HHSC the flexibility to extend the duration of the license to allow HHSC additional time to perform the health inspection of the DAHS facility.

The proposed amendments in subsection (i) state that HHSC conducts a health inspection after HHSC issues a temporary change of ownership license and before issuance of a three-year license. The proposed amendments also correct obsolete references from the legacy agency, DADS, to HHSC.

The proposed amendments in subsection (j) state that HHSC, in its sole discretion, may conduct an on-site Life Safety Code inspection of the DAHS facility after issuing a temporary change of ownership license. The proposed amendments also correct obsolete references from the legacy agency, DADS, to HHSC.

The proposed amendments in subsection (k) specify the requirements for HHSC to determine whether to issue the temporary change of ownership license holder a three-year license. Among other requirements, the facility must pass the health inspection described in the rule. In addition, the amendments clarify the effective date of the three-year license.

The proposed amendment in subsection (l) corrects obsolete references from the legacy agency, DADS, to HHSC.

The proposed amendments add new subsection (m) to outline the process for a license holder to change its name when a change of ownership is not involved. This change is consistent with similar provisions in the change of ownership rules for other long-term care providers.

FISCAL NOTE

Trey Wood, Chief Financial Officer, has determined that for each year of the first five years that the rule will be in effect, enforcing or administering the rule does not have foreseeable implications relating to costs or revenues of state or local governments.

GOVERNMENT GROWTH IMPACT STATEMENT

HHSC has determined that during the first five years that the rule will be in effect:

(1) the proposed rule will not create or eliminate a government program;

(2) implementation of the proposed rule will not affect the number of HHSC employee positions;

(3) implementation of the proposed rule will result in no assumed change in future legislative appropriations;

(4) the proposed rule will not affect fees paid to HHSC;

(5) the proposed rule will not create a new rule;

(6) the proposed rule will expand an existing rule;

(7) the proposed rule will not change the number of individuals subject to the rule; and

(8) the proposed rule will not affect the state's economy.

SMALL BUSINESS, MICRO-BUSINESS, AND RURAL COMMUNITY IMPACT ANALYSIS

Trey Wood, Chief Financial Officer, has also determined that there will be no adverse economic effect on small businesses, micro-businesses, or rural communities. The proposed rules do not require changes to current business practices or impose additional costs or fees on those required to comply.

LOCAL EMPLOYMENT IMPACT

The proposed rule will not affect a local economy.

COSTS TO REGULATED PERSONS

Texas Government Code §2001.0045 does not apply to this rule because the rule does not impose a cost on regulated persons.

PUBLIC BENEFIT AND COSTS

Stephen Pahl, Deputy Executive Commissioner for Regulatory Services, has determined that for each year of the first five years the rule is in effect, the public benefit will be an anticipated decrease in the amount of time for a license to be issued in the incoming owner's name based on a change of ownership. The issuance of a temporary change of ownership license in the incoming owner's name allows the new owner to begin operational processes while HHSC is completing the health inspection of the facility. These operational processes include entering contracts for leasing, lending, and Medicaid. Subsequently, the new owner can begin Medicaid billing and receive funding sooner, which will have a positive impact on the residents being served by the facility.

Another anticipated public benefit is a decrease in the transition time for the change of ownership, which will help both the outgoing and incoming owners of a facility in terms of business processes.

Trey Wood has also determined that for the first five years the rule is in effect, there are no anticipated economic costs to persons who are required to comply with the proposed rule because the proposed rule does not require changes to current business practices or impose additional costs or fees on those required to comply.

TAKINGS IMPACT ASSESSMENT

HHSC has determined that the proposal does not restrict or limit an owner's right to his or her property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking under Texas Government Code §2007.043.

PUBLIC COMMENT

Written comments on the proposal may be submitted to Rules Coordination Office, P.O. Box 13247, Mail Code 4102, Austin, Texas 78711-3247, or street address 4900 North Lamar Boulevard, Austin, Texas 78751; or emailed to HHSCLTCRRules@hhs.texas.gov.

To be considered, comments must be submitted no later than 31 days after the date of this issue of the Texas Register. Comments must be (1) postmarked or shipped before the last day of the comment period; (2) hand-delivered before 5:00 p.m. on the last working day of the comment period; or (3) emailed before midnight on the last day of the comment period. If last day to submit comments falls on a holiday, comments must be postmarked, shipped, or emailed before midnight on the following business day to be accepted. When emailing comments, please indicate "Comments on Proposed Rule 21R132" in the subject line.

STATUTORY AUTHORITY

The amendment is authorized by Texas Government Code §531.0055, which provides that the Executive Commissioner of HHSC shall adopt rules for the operation and provision of services by the health and human services agencies, and Texas Human Resources Code §103.004, which provides that the Executive Commissioner shall adopt rules for implementing Chapter 103, Day Activity and Health Services.

The amendment implements Texas Government Code §531.0055 and Texas Human Resources Code §103.004.

§559.16.Change of Ownership and Notice of Changes.

(a) For purposes of this section, a temporary change of ownership license is a temporary license issued to an applicant who proposes to become the new operator of a facility that exists on the date the application is submitted.

(b) [(a)] A license holder may not transfer its license. The applicant (new license holder) must obtain a temporary change of ownership license followed by an initial three-year license in accordance with this section. When the Texas Health and Human Services Commission (HHSC) approves the change of ownership by issuing a temporary change of ownership license to the new license holder, the current license holder's license becomes invalid as of the effective date of the change of ownership indicated in the change of ownership application. Between the effective date of the change of ownership and the issuance of the temporary change of ownership license, the existing license holder remains responsible under its license; however, the applicant may operate a facility on behalf of the current license holder during such period of time.

(c) The applicant must submit to HHSC through the online portal:

(1) a complete application for a license in accordance with HHSC instructions and §559.11 of this subchapter (relating to Criteria for Licensing) or an incomplete application with a letter explaining the circumstances that prevented the inclusion of the missing information;

(2) the application fee, in accordance with §559.21 of this subchapter (relating to License Fees); and

(3) a signed and notarized Change of Ownership Transfer Affidavit HHSC Form 1092 from the applicant and the facility's current license holder of intent to transfer operation of the facility from the current license holder to the applicant, beginning on the change of ownership effective date specified on the change of ownership application.

(d) [(b)] To avoid a facility operating without a license, an applicant [gap in the license because of a change in ownership of the facility, a prospective license holder] must submit all items required by subsection (c) of this section [to DADS a complete application for a license under §98.11 of this title (relating to Criteria for Licensing)] at least 30 days before the anticipated date of a change of ownership, unless the 30-day notice requirement is waived in accordance with subsection (e) of this section. [The applicant must meet all requirements for a license. If the applicant has filed a timely and sufficient application for a license and otherwise meets all requirements for a license, DADS will issue the applicant a license effective on the date of the change of ownership. DADS considers an applicant has filed a timely and sufficient application for a license if the applicant:]

[(1) submits a complete application to DADS, and DADS receives that complete application at least 30 days before the anticipated date of change of ownership;]

[(2) submits an incomplete application to DADS with a letter explaining the circumstances that prevented the inclusion of the missing information, and DADS receives the incomplete application and letter at least 30 days before the anticipated date of change of ownership; or]

[(3) submits an application to DADS, and DADS receives the application by the date of change of ownership, and the applicant proves to DADS satisfaction that the health and safety of the facility clients required an emergency change of ownership.]

[(c) If the application is postmarked by the filing deadline, the application will be considered to be timely filed if received in DADS Licensing and Credentialing Section, Regulatory Services Division, within 15 days after the postmark.]

(e) HHSC may waive the 30-day notice required in subsection (d) of this section if HHSC determines that the applicant presents evidence showing that circumstances prevented the submission of the items in subsection (c) of this section at least 30 days before the anticipated change of ownership and that not waiving the 30-day requirement would create a threat to client health and safety.

(f) Upon HHSC approval of the items specified in subsection (c) of this section, HHSC issues a temporary change of ownership license to the applicant if HHSC finds that the applicant, all controlling persons, and all persons disclosed in the application satisfy all applicable requirements in §559.11 of this subchapter, §559.13 of this subchapter (relating to Applicant Disclosure Requirements), and §559.19 of this subchapter (relating to Criteria for Denying a License or Renewal of a License).

(1) The issuance of a temporary change of ownership license constitutes HHSC's official written notice to the facility of the approval of the application for a change of ownership.

(2) The effective date of the temporary change of ownership license is the date requested in the application and cannot precede the date the application is received by HHSC through the online portal.

(g) A temporary change of ownership license expires on the earlier of:

(1) 90 days after its effective date or the last day of any extension HHSC provides in accordance with subsection (h) of this section; or

(2) the date HHSC issues a three-year license in accordance with subsection (k) of this section.

(h) HHSC, in its sole discretion, may extend a temporary change of ownership license for a term of 90 days at a time based upon extenuating circumstances.

(i) [(d)] HHSC [DADS ] conducts an on-site health inspection to verify compliance with the licensure requirements after [before] issuing a temporary change of ownership license [as a result of a change of ownership]. HHSC [DADS] may conduct a desk review instead of an on-site health inspection after [before] issuing a temporary change of ownership license [as a result of a change of ownership] if:

(1) less than 50 percent of the direct or indirect ownership interest of the former license holder changed, when compared to the new license holder; or

(2) every person with a disclosable interest in the new license holder had a disclosable interest in the former license holder.

(j) [(e)] HHSC [DADS ], in its sole discretion, may conduct an on-site Life Safety Code inspection after [before] issuing a temporary change of ownership license [as a result of a change of ownership].

(k) If the applicant, all controlling persons, and all persons disclosed in the application satisfy all applicable requirements of §559.11, §559.13, and §559.19 of this subchapter for a license, and the facility passes the change of ownership health inspection as described in subsection (i) of this section, HHSC issues a three-year license. The effective date of the three-year license is the same date as the effective date of the change of ownership and cannot precede the date the application was received by HHSC through the online portal.

(l) [(f)] If a license holder adds an owner with a disclosable interest, but the license holder does not undergo a change of ownership, the license holder must notify HHSC [DADS] of the addition no later than 30 days after the addition of the owner.

(m) If a license holder changes its name but does not undergo a change of ownership, the license holder must notify HHSC and submit documentation evidencing a legal name change by submitting an application through the online portal. On receipt of the notice and documentation, HHSC reissues the current license in the license holder's new name.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 3, 2022.

TRD-202201747

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: June 19, 2022

For further information, please call: (512) 438-3161


CHAPTER 745. LICENSING

The Executive Commissioner of the Texas Health and Human Services Commission (HHSC) proposes amendments to §745.115, concerning What programs regulated by other governmental entities are exempt from Licensing regulation; §745.139, concerning What will Licensing do if I operate a combination of exempt and regulated programs; and §745.8605, concerning When can Licensing recommend or impose an enforcement action against my operation, in Title 26, Texas Administrative Code, Chapter 745, Licensing.

BACKGROUND AND PURPOSE

The purpose of this proposal is to amend rules in Chapter 745 that address the subject matter of an emergency rule and an emergency rule amendment adopted in July 2021, relating to operations that are exempt from licensure and regulation by HHSC.

The emergency rule and rule amendment were adopted to comply with Governor Abbott's direction in a May 31, 2021, proclamation declaring a state of disaster in certain Texas counties and for affected state agencies. In this proclamation, Governor Abbott directed HHSC to discontinue state licensing of certain child-care facilities that provide care or shelter to undocumented immigrants. The Governor suspended §42.046 and §42.048 of the Texas Human Resources Code and all other relevant laws to the extent necessary for HHSC to comply with this direction. Based on the declared disaster, HHSC found that imminent peril to the public health, safety, and welfare of the state required immediate adoption of emergency rules. HHSC adopted an emergency amendment to clarify that a program that provides care exclusively to unlawfully present individuals is exempt from licensure and regulation by HHSC. HHSC also adopted an emergency rule to require a General Residential Operation (GRO) either to cease providing care or shelter to an unlawfully present individual by August 30, 2021, or to surrender its license to HHSC. The emergency rules also provide that child-care programs that are exempt from licensing and regulation by HHSC must be operated separately from GROs that are licensed or certified by HHSC and outlines the enforcement actions HHSC may take if a GRO provides care or shelter to an unlawfully present individual after August 30, 2021.

These rules substantially adapt the content of the emergency rules into regular rules. Accordingly, the proposed amendments reflect the intent and content of the emergency rules but have been updated to (1) make the licensure exemption outlined in the emergency rule amendment ongoing; and (2) incorporate the enforcement components in the emergency rule into CCR's existing enforcement framework.

SECTION-BY-SECTION SUMMARY

The proposed amendment to §745.115 adds an exemption from licensure and regulation by HHSC for a program that provides care exclusively to unlawfully present individuals.

The proposed amendment to §745.139 separates the rule into subsections (a) and (b) to clarify that the rule does not apply to an exempt program whose exemption is described in proposed §745.115(1)(B).

The proposed amendment to §745.8605 adds provision of care to an unlawfully present individual to the list of actions against which CCR can recommend or impose an enforcement action.

FISCAL NOTE

Trey Wood, Chief Financial Officer, has determined that for each year of the first five years that the rules will be in effect, enforcing or administering the rules does not have foreseeable implications relating to costs or revenues of state or local governments.

GOVERNMENT GROWTH IMPACT STATEMENT

HHSC has determined that during the first five years that the rules will be in effect:

(1) the proposed rules will not create or eliminate a government program;

(2) implementation of the proposed rules will not affect the number of HHSC employee positions;

(3) implementation of the proposed rules will result in no assumed change in future legislative appropriations;

(4) the proposed rules will not affect fees paid to HHSC;

(5) the proposed rules will not create a new rule;

(6) the proposed rules will expand existing rules;

(7) the proposed rules will not change the number of individuals subject to the rules; and

(8) the proposed rules will not affect the state's economy.

SMALL BUSINESS, MICRO-BUSINESS, AND RURAL COMMUNITY IMPACT ANALYSIS

Trey Wood has also determined that there will be no adverse economic effect on small businesses, micro-businesses, or rural communities. The rules do not impose any additional costs on small businesses, micro-businesses, or rural communities that are required to comply with the rules. In addition, there is no requirement to alter current business practices.

LOCAL EMPLOYMENT IMPACT

The proposed rules will not affect a local economy.

COSTS TO REGULATED PERSONS

Texas Government Code §2001.0045 does not apply to these rules because the rules (1) are necessary to protect the health, safety, and welfare of the residents of Texas; and (2) do not impose a cost on regulated persons.

PUBLIC BENEFIT AND COSTS

Rachel Ashworth-Mazerolle, Associate Commissioner for Child Care Regulation, has determined that for each year of the first five years the rules are in effect, the public benefit will be rules that comply with the Governor's May 31, 2021, Disaster Proclamation, as well as any similar future proclamation.

Trey Wood has also determined that for the first five years the rules are in effect, there are no anticipated economic costs to persons required to comply with the proposed rules because the proposal does not impose any additional costs or fees on persons required to comply with the rules.

TAKINGS IMPACT ASSESSMENT

HHSC has determined that the proposal does not restrict or limit an owner's right to his or her property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking under Texas Government Code §2007.043.

PUBLIC COMMENT

Questions about the content of this proposal may be directed by email to Aimee.Belden@hhs.texas.gov.

Written comments on the proposal may be submitted to Aimee Belden, Rules Writer, Child Care Regulation, Texas Health and Human Services Commission, E-550, P.O. Box 149030, Austin, Texas 78714-9030; or by email to CCRRules@hhs.texas.gov.

To be considered, comments must be submitted no later than 31 days after the date of this issue of the Texas Register. Comments must be (1) postmarked or shipped before the last day of the comment period; (2) hand-delivered before 5:00 p.m. on the last working day of the comment period; or (3) emailed before midnight on the last day of the comment period. If the last day to submit comments falls on a holiday, comments must be postmarked, shipped, or emailed before midnight on the following business day to be accepted. When emailing comments, please indicate "Comments on Proposed Rule 22R031" in the subject line.

SUBCHAPTER C. OPERATIONS THAT ARE EXEMPT FROM REGULATION

DIVISION 2. EXEMPTIONS FROM REGULATION

26 TAC §745.115, §745.139

STATUTORY AUTHORITY

The amendments are authorized by Texas Government Code §531.0055, which provides that the Executive Commissioner of HHSC shall adopt rules for the operation and provision of services by the health and human services agencies, and Texas Government Code §531.02011, which transferred the regulatory functions of the Texas Department of Family and Protective Services to HHSC. In addition, Texas Human Resources Code §42.042(a) requires HHSC to adopt rules to carry out the requirements of Texas Human Resources Code Chapter 42.

The amendments affect Texas Government Code §531.0055 and Texas Human Resources Code §42.042.

§745.115.What programs regulated by other governmental entities are exempt from Licensing regulation?

The following programs and facilities are exempt from our regulation:

Figure: 26 TAC §745.115 (.pdf)

[Figure: 26 TAC §745.115]

§745.139.What will Licensing do if I operate a combination of exempt and regulated programs?

(a) If the programs are separate, each program that meets the criteria for an exemption is exempt. If they are not separate, then they are all subject to our regulation, unless the exempt program meets the exemption described in §745.115(1)(B) of this division.

(b) To demonstrate that the programs are separate, you must show that the programs:

(1) Have separate caregivers or have caregivers that do not provide care to more than one program at the same time; and

(2) Do not use the same building or areas at the same time, except that the programs may share restrooms and indoor/outdoor activity areas if you have a written plan regarding how caregivers from each program will supervise children using shared spaces.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 3, 2022.

TRD-202201715

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: June 19, 2022

For further information, please call: (512) 438-3269


SUBCHAPTER L. ENFORCEMENT ACTIONS

DIVISION 1. OVERVIEW OF ENFORCEMENT ACTIONS

26 TAC §745.8605

The amendment is authorized by Texas Government Code §531.0055, which provides that the Executive Commissioner of HHSC shall adopt rules for the operation and provision of services by the health and human services agencies, and Texas Government Code §531.02011, which transferred the regulatory functions of the Texas Department of Family and Protective Services to HHSC. In addition, Texas Human Resources Code §42.042(a) requires HHSC to adopt rules to carry out the requirements of Texas Human Resources Code Chapter 42.

The amendment affects Texas Government Code §531.0055 and Texas Human Resources Code §42.042.

§745.8605.When can Licensing recommend or impose an enforcement action against my operation?

We can recommend or impose an enforcement action any time we find one of the following:

(1) You supplied false information or made false statements during the application process;

(2) You falsified or permitted to be falsified any record or other materials that are required to be maintained by minimum standards;

(3) You do not have an acceptable reason for not having the required liability insurance in §745.251 of this chapter (relating to What are the acceptable reasons not to have liability insurance?);

(4) You do not pay the required fees;

(5) A single serious deficiency of a minimum standard, rule, or statute, including a finding of abuse or neglect or background check matches;

(6) Several deficiencies that create an endangering situation;

(7) A repetition or pattern of deficiencies;

(8) An immediate threat or danger to the health or safety of children;

(9) You or someone working at your operation refuses, prevents, or delays our ability to conduct an inspection or investigation, or the ability of the Department of Family and Protective Services to conduct an investigation of an allegation of abuse, neglect, orexploitation;

(10) A failure to timely report necessary changes to Licensing;

(11) A failure to comply with any restrictions or limits placed on your permit;

(12) A failure to meet the terms and conditions of your probation;

(13) A failure to comply with minimum standards, rules, or statutes at the end of the suspension period;

(14) A failure to submit information to us within two days of a change in your controlling persons, as required in §745.903 of this chapter (relating to When and how must an operation submit controlling-person information to Licensing?);

(15) You fail to correct by the compliance date any deficiency that is not pending due process;

(16) You apply for a permit after we designate you as a controlling person, but before the designation is sustained;

(17) It is within five years since your designation as a controlling person has been sustained;

(18) You apply for a permit to operate a child care operation, and you are barred from operating a child care operation in another state;

(19) You apply for a permit to operate a child care operation, and your permit to operate a child care operation in another state was revoked;

(20) You apply for a permit to operate a child care operation, and your permit to operate was revoked, suspended, or terminated by another Texas state agency as outlined in Texas Government Code, Chapter 531, Subchapter W (relating to Adverse Licensing, Listing, or Registration Decisions);

(21) You apply for a permit to operate a child care operation and:

(A) You fail to comply with public notice and hearing requirements as set forth in §745.277 of this chapter (relating to What will happen if I fail to comply with public notice and hearing requirements?); or

(B) The results of the public hearing meet one of the criteria set forth in §745.340(b) of this chapter (relating to What factors will we consider when evaluating an application for a permit?).

(22) You operate a child care operation, and that operation discharges or retaliates against an employee, client, resident, or other person because the person or someone on behalf of the person files a complaint, presents a grievance, or otherwise provides in good faith, information relating to the misuse of restraint or seclusion at the operation;

(23) A reason set forth in Texas Human Resources Code, §42.078;

(24) A failure to pay an administrative penalty under Texas Human Resources Code, §42.078;

(25) A failure to follow conditions or restrictions placed on a person's presence at an operation; [or]

(26) During the application process you were exempt from the public notice and hearing requirements under §745.273(b) of this chapter (relating to Which residential child-care operations must meet the public notice and hearing requirements?), but you never provide or cease to provide trafficking victim services and fail to meet the public notice and hearing requirements; or

(27) You provide care to an unlawfully present individual in violation of Chapter 748, Subchapter B, Division 3 of this title (relating to Care of Unlawfully Present Individuals).

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 3, 2022.

TRD-202201716

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: June 19, 2022

For further information, please call: (512) 438-3269


CHAPTER 748. MINIMUM STANDARDS FOR GENERAL RESIDENTIAL OPERATIONS

The Executive Commissioner of the Texas Health and Human Services Commission (HHSC) proposes an amendment to §748.7, concerning How are these regulations applied to family residential centers; and new §748.81, concerning What do certain terms mean in this division, §748.83, concerning May I provide care to or shelter an unlawfully present individual, and §748.85, concerning What are the requirements if I operate my general residential operation while an exempt program separately provides care for an unlawfully present individual, in Title 26, Texas Administrative Code, Chapter 748, Minimum Standards for General Residential Operations.

BACKGROUND AND PURPOSE

The purpose of this proposal is to amend a rule and add new rules in Chapter 748 that address the subject matter of an emergency rule adopted in July 2021, relating to providing care or shelter to unlawfully present individuals in a General Residential Operation (GRO) licensed by HHSC.

The emergency rule was adopted to comply with Governor Abbott's direction in a May 31, 2021, proclamation declaring a state of disaster in certain Texas counties and for affected state agencies. In this proclamation, Governor Abbott directed HHSC to discontinue state licensing of certain child-care facilities that provide care or shelter to undocumented immigrants. The Governor suspended §42.046 and §42.048 of the Texas Human Resources Code and all other relevant laws to the extent necessary for HHSC to comply with this direction. Based on the declared disaster, HHSC found that imminent peril to the public health, safety, and welfare of the state required immediate adoption of emergency rules. Consequently, HHSC adopted an emergency rule to require a GRO either to cease providing care or shelter to an unlawfully present individual by August 30, 2021, or to surrender its license to HHSC. The emergency rules also provide that child-care programs that are exempt from licensing and regulation by HHSC must be operated separately from GROs that are licensed or certified by HHSC and outlines the enforcement actions HHSC may take if a GRO provides care or shelter to an unlawfully present individual after August 30, 2021.

These rules substantially adapt the content of the emergency rules into regular rules. Accordingly, the proposed rules and amendment reflect the intent and content of the emergency rule but have been updated to remove timeframes for notifications and permit relinquishment that have since expired.

SECTION-BY-SECTION SUMMARY

The proposed amendment to §748.7 adds subsection (f) to clarify that the rule applies only as long as a GRO is authorized to provide care for children who are unlawfully present in the United States and in the custody of the federal government.

Proposed new §748.81 adds definitions for the terms "exempt program" and "unlawfully present individual" used in proposed new Division 3, relating to Care of Unlawfully Present Individuals.

Proposed new §748.83 provides that a GRO may not provide care or shelter to an unlawfully present individual. However, this rule also allows the provider to provide care for an unlawfully present individual at an exempt program that operates separately from the GRO.

Proposed new §748.85 specifies the requirements a GRO must follow if operating while an exempt program separately cares for an unlawfully present individual, including (1) notifying CCR in writing; (2) ensuring that the exempt program has separate caregivers or caregivers that do not provide care for both programs simultaneously; (3) ensuring that the exempt program does not use an area of the building or grounds except under certain circumstances specified in a written plan that includes supervision of children in the shared space; and (4) submitting a written plan to CCR detailing how the licensed GRO will operated separately from the exempt program.

FISCAL NOTE

Trey Wood, Chief Financial Officer, has determined that for each year of the first five years that the rules will be in effect, enforcing or administering the rules does not have foreseeable implications relating to costs or revenues of state or local governments.

GOVERNMENT GROWTH IMPACT STATEMENT

HHSC has determined that during the first five years that the rules will be in effect:

(1) the proposed rules will not create or eliminate a government program;

(2) implementation of the proposed rules will not affect the number of HHSC employee positions;

(3) implementation of the proposed rules will result in no assumed change in future legislative appropriations;

(4) the proposed rules will not affect fees paid to HHSC;

(5) the proposed rules will create new rules;

(6) the proposed rules will expand an existing rule;

(7) the proposed rules will not change the number of individuals subject to the rules; and

(8) the proposed rules will not affect the state's economy.

SMALL BUSINESS, MICRO-BUSINESS, AND RURAL COMMUNITY IMPACT ANALYSIS

Trey Wood has also determined that there will be no adverse economic effect on small businesses, micro-businesses, or rural communities. The rules do not impose any additional costs on small businesses, micro-businesses, or rural communities that are required to comply with the rules. In addition, the rules do not require changes to current business practices.

LOCAL EMPLOYMENT IMPACT

The proposed rules will not affect a local economy.

COSTS TO REGULATED PERSONS

Texas Government Code §2001.0045 does not apply to these rules because the rules (1) are necessary to protect the health, safety, and welfare of the residents of Texas; and (2) do not impose a cost on regulated persons.

PUBLIC BENEFIT AND COSTS

Rachel Ashworth-Mazerolle, Associate Commissioner for Child Care Regulation, has determined that for each year of the first five years the rules are in effect, the public benefit will be rules that comply with the Governor's May 31, 2021, Disaster Proclamation, as well as any similar future proclamation.

Trey Wood has also determined that for the first five years the rules are in effect, there are no anticipated economic costs to persons required to comply with the proposed rule because the proposal does not impose any additional costs or fees on persons required to comply with the rules.

TAKINGS IMPACT ASSESSMENT

HHSC has determined that the proposal does not restrict or limit an owner's right to his or her property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking under Texas Government Code §2007.043.

PUBLIC COMMENT

Questions about the content of this proposal may be directed by email to Aimee.Belden@hhs.texas.gov.

Written comments on the proposal may be submitted to Aimee Belden, Rules Writer, Child Care Regulation, Texas Health and Human Services Commission, E-550, P.O. Box 149030, Austin, Texas 78714-9030; or by email to CCRRules@hhs.texas.gov.

To be considered, comments must be submitted no later than 31 days after the date of this issue of the Texas Register. Comments must be (1) postmarked or shipped before the last day of the comment period; (2) hand-delivered before 5:00 p.m. on the last working day of the comment period; or (3) emailed before midnight on the last day of the comment period. If the last day to submit comments falls on a holiday, comments must be postmarked, shipped, or emailed before midnight on the following business day to be accepted. When faxing or emailing comments, please indicate "Comments on Proposed Rule 22R031" in the subject line.

SUBCHAPTER A. PURPOSE AND SCOPE

26 TAC §748.7

STATUTORY AUTHORITY

The amendment is authorized by Texas Government Code §531.0055, which provides that the Executive Commissioner of HHSC shall adopt rules for the operation and provision of services by the health and human services agencies, and Texas Government Code §531.02011, which transferred the regulatory functions of the Texas Department of Family and Protective Services to HHSC. In addition, Texas Human Resources Code §42.042(a) requires HHSC to adopt rules to carry out the requirements of Texas Human Resources Code Chapter 42.

The amendment affects Texas Government Code §531.0055 and Texas Human Resources Code §42.042.

§748.7.How are these regulations applied to family residential centers?

(a) Definition. A family residential center is one that meets all of the following requirements:

(1) The center is operated by or under a contract with United States Immigration and Customs Enforcement;

(2) The center is operated to enforce federal immigration laws;

(3) Each child at the center is detained with a parent or other adult family member, who remains with the child at the center; and

(4) A parent or family member with a child provides the direct care for the child except for specific circumstances when the child is cared for directly by the center or another adult in the custody of the center.

(b) Classification. A family residential center is a general residential operation (GRO) and must comply with all associated requirements for GROs, unless the family residential center is approved for an individual waiver or variance or an exception is provided in this section. The department is responsible for regulating the provision of childcare as authorized by Chapters 40 and 42, Texas Human Resources Code and Chapter 261, Texas Human Resources Code. The department does not oversee requirements that pertain to other law, including whether the facilities are classified as secure or in compliance with any operable settlement agreements or other state or federal restrictions.

(c) Exceptions. A family residential center is not required to comply with all terms of the following Minimum Standards:

(1) the limitation of room occupants to four in §748.3357 of this title (relating to What are the requirements for floor space in a bedroom used by a child?), except that nothing in this exception shall be construed to require fewer than 60 square feet per child;

(2) the limitation on a child sharing a bedroom with an adult in §748.3361 of this title (relating to May a child in care share a bedroom with an adult?), if the bedroom is being shared in order to allow a child to remain with the child's parent or other family member; and

(3) the limitations on children of the opposite gender sharing a room in §748.3363 of this title (relating to May children of opposite genders share a bedroom?), except that nothing in this exception shall be construed to permit children from different families who are over the age of six and members of the opposite gender to share a bedroom.

(d) Limitation of exception. Notwithstanding subsection (c) of this section, and as further described in §745.8313 of this title (relating to Is a waiver or variance unconditional?), the department retains the authority for placing conditions on the scope of the exceptions authorized for a family residential center, including conditions related to limiting occupancy in accordance with fire safety standards, limitations related to allowing children and adults of the opposite gender to occupy the same room only if they are part of the same family, and any other limitation determined by the department to be necessary to the health, safety, or welfare of children in care.

(e) Division of responsibility. In addition to the application materials described in §745.243(6) of this title (relating to What does a completed application for a permit include?), an applicant for a license under this section must submit the policies, procedures, and any other documentation that the department deems necessary to clarify the division of supervisory and caretaking responsibility between employees of the facility and the parents and other adult family members who are housed with the children. The department must approve the documentation during the application process and any subsequent amendments to the policies and procedures.

(f) Applicability. This rule is applicable only to the extent that a GRO may provide care to children who are unlawfully present in the United States and in the custody of the federal government.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 3, 2022.

TRD-202201717

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: June 19, 2022

For further information, please call: (512) 438-3269


SUBCHAPTER B. DEFINITIONS AND SERVICES

DIVISION 3. CARE OF UNLAWFULLY PRESENT INDIVIDUALS

26 TAC §§748.81, 748.83, 748.85

STATUTORY AUTHORITY

The new rules are authorized by Texas Government Code §531.0055, which provides that the Executive Commissioner of HHSC shall adopt rules for the operation and provision of services by the health and human services agencies, and Texas Government Code §531.02011, which transferred the regulatory functions of the Texas Department of Family and Protective Services to HHSC. In addition, Texas Human Resources Code §42.042(a) requires HHSC to adopt rules to carry out the requirements of Texas Human Resources Code Chapter 42.

The new rules affect Texas Government Code §531.0055 and Texas Human Resources Code §42.042.

§748.81.What do certain terms mean in this division?

The terms used in this division have the following meanings:

(1) Exempt program--A child-care program that is exempt from or otherwise not subject to regulation as a child-care operation by the Texas Health and Human Services Commission (HHSC) under Chapter 42, Texas Human Resources Code (HRC), and Chapter 745, Subchapter C of this title (relating to Operations that are Exempt from Regulation).

(2) Unlawfully present individual--An individual who is neither a citizen nor has a right to be present in the United States under the Immigration and Nationality Act or accompanying regulations or decisions, who is in the custody of the federal government. This term includes a child who has no lawful immigration status in the United States and:

(A) With respect to whom, there is no parent or legal guardian in the United States, or no parent or legal guardian in the United States available to provide care and physical custody, as described in 6 U.S. Code §279(g)(2); or

(B) Who is detained with a parent or other adult family member who is not lawfully present in the United States.

§748.83.May I provide care to or shelter an unlawfully present individual?

You may not provide care or shelter to an unlawfully present individual at your general residential operation. However, you may operate an exempt program that provides care for an unlawfully present individual separately from your general residential operation.

§748.85.What are the requirements if I operate my general residential operation while an exempt program separately provides care for an unlawfully present individual?

(a) If you provide care for an unlawfully present individual at an exempt program while you operate your general residential operation:

(1) You must notify Licensing in writing;

(2) You must ensure that the exempt program:

(A) Has separate caregivers from your operation or caregivers that do not provide care at your operation while they care for children at the exempt program; and

(B) Does not use an area of your building or grounds at the same time that your operation is using the area, except that the exempt program and your operation may share restrooms and indoor and outdoor activity areas under a written plan regarding how caregivers from your operation and the exempt program will supervise the children in the shared space.

(b) You must submit to Licensing a written plan for how the exempt program will operate separately from your general residential operation, as required by subsection (a)(2) of this section.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 3, 2022.

TRD-202201718

Karen Ray

Chief Counsel

Health and Human Services Commission

Earliest possible date of adoption: June 19, 2022

For further information, please call: (512) 438-3269